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Life Time Fitness Q1 2010 Earnings Call Transcript

Life Time Fitness Q1 2010 Earnings Call Transcript

Life Time Fitness [LTM]

Q1 2010 Earnings Call

April 22, 2010 9:00 am ET


Ken Cooper - Vice President of Finance

Bahram Arkadi - Chairman of the Board, President, Chief Executive Officer

Mike Robinson - Chief Financial Officer


Paul Luis- Credit Line

Anthony Gikas – RJ Hottovy

Edward Aaron – RBC Capital

Bakley Smith

Michael Lasser – Barclays Capital

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Good day Ladies and Gentleman and welcome to the Quarter 1 2010 Life Time Fitness Earnings Call. My name is [Modasta] and I will be your operator for today. At this time, all participants are on list only mode. Later, we will conduct a Question and Answer session. If at any time you require operator assistance, please press star followed by zero and we will be happy to assist you. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Ken Cooper, Vice President of Finance. Please proceed.

Ken Cooper

Thanks, [Modesta]. Good morning and thank you for joining us in today's conference call to discuss the first quarter of 2010 financial result for Life Time Fitness. We assure our earnest press release this morning. If you did not obtain a copy, you may access that in our website which is On current insurance of our first quarter result. We have filed a form with [AK] with the [ACC] which also includes the press release. On today's call Bahram Akradi, our Chairman and CEO will discuss key highlights from our first quarter in our operation. Following that Mike Robinson in seeing CEO's over view our financial high lights and detail. Once we completed our prepared of marks, we will answer your question until 11 a.m Eastern Time. At that point of the call the [Modesta] will provide instructions on how to ask a question. I will close with the tentative date of our second quarter 2010 earnings call. Finally, replay of this teleconference will be available on our website at approximately 1 p.m Eastern Time today. Today is conference call is contain four looking statement in feature results could differ materially in those statement made. Actual results may be affected by many factors, including the risk non [certainties]

identified in our [SCC's] filings. Certain information in our earning is release and any information disclose on this call [include] non gap financial measures including [Ivida] and Free Cash Flow. We included reconciliation of the differences between gap and non gap measures in our earnings to release and our form [AK]. Other information about our non gap data is included in our form [AK]. Also, I would like to take a moment to remind you our annual share holder meeting takes place at 2 p.m Eastern Time today at our Corporate Office in [Chansen], Minnesota. Accordingly, we will be preparing for in conducting that meeting and will not be again responding the e-mails or phone inquiries until afterward or approximately 3 p.m Eastern. Your patience and flexibility are greatly appreciated. With that, let me turn the call over [Bahram Arkadi]. Bahram?

Bahram Arkadi

Thanks, Ken. I'm excited to be with you here and to provide my thoughts on our first quarter of 2010. This is the first quarter in the last year and a half that I feel we are really seeing results from all the hardwork of the Life Time Fitness Team. While over the last five quarters, we have strategically and tactically executed as needed . We were impatiently looking for fraction of at least some of our initiatives towards better member retention and the change of the same store same story to a positive one. The first quarter of 2010 allowed us to see the result of this hard work. As you have probably all ready seen with the membership growth of 2.3%. Our 13


month same store sales improve from a negative 2.7 last year first quarter to 2.6% this year. Our mature comes improving by over 300 basis points in set the revenue for membership matching all time high at $111. Net income growth of 18% and finally our quarterly efficient grade decreasing to 8.5%. We feel that this accomplishment are do last to market conditions which we are still challenging.

But, much more so to do the adjustment we had made to our approach and our own executions. This is important because while we do not have control of the over all market conditions. We do have control of our strategy and executions. As I mentioned in our last call, the 2010 focus in order priority is bringing and maintaining retention to satisfactory levels and beyond. Positive comes for all stores. We hope to achieve positive comes on the mature stores in the second half of the year and three delivering signs of an accelerated comprehensive healthy way of life growth plan later this year. As the relays of retention a rate of better than 64% annually is the main area of focus for our company. While we achieve good improvement in the first quarter.

We need to continue our hard efforts and extreme focus so, this trend continues. We hope to achieve an intuition grade of less than 9% for the second quarter as well. I hope, I would hope that this would then set us up nicely to keep the momentum going and see substantial improvement in this intuition numbers as compares to the 2009 second half of the year. Re intensifying our connectivity and engagement measures over the next couple of quarters to put us in the right place to achieve the member retention we want in the third and fourth quarters. As it relays to the same store sales metric. We fully expect to improve outcomes. However, we will not be satisfied until we turn the mature stores positive. Ambitiously, our goal is to make that happen in the second quarter otherwise, we believe it will occur in the third quarter.

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